Representative Jim Knoblach, chair of the House Ways and Means Committee, discusses his proposed budget resolution during the Mar. 24, 2015, committee hearing. Source: Archived video from MNHouseInfo on YouTube

On Tuesday night the House Ways and Means Committee set the budget resolution and budget targets for the various finance committees (view the committee hearing here). You can view the budget resolution with spending targets here, and a spreadsheet detailing changes across bienniums and a comparison with Governor Dayton’s budget targets here. The passage of the House budget resolution means that the various House finance committees can now begin working in earnest on their omnibus finance bills.

The Senate budget targets are set to be released by the end of this week.

House Budget Resolution: Max Limit for Net Spending is $42,581,425,000

The budget resolution passed on Tuesday puts the maximum limit for net spending for the 2016-2017 biennium at $42,581,425,000, which includes about $2 billion in tax cuts. This is about $402 million less than the Governor’s recommended target but about $1.39 billion more than the February forecast base for FY 2016-17. Rep. Jim Knoblach, chair of the committee, said that his budget resolution represents about a 4% increase in spending, likening it to the average rate of growth for the average family. According to the Minnesota Management & Budget February forecast, the state has a $1.869 billion surplus.

In addition to the spending targets, Rep. Knoblach proposed to increase the budget reserve (the “rainy day” fund) by $100 million; Governor Dayton’s proposal did not include any increase in the budget reserve. The House budget resolution would leave an unspent balance of $314,339,000 (compared to Governor Dayton’s $12,399,000). Rep. Knoblach explained that while this hasn’t been done in such a high amount before, he felt that it was important to have flexibility to address potential changes in the economy as well as uncertainties in certain areas (such as health and human services

[HHS]); having an unspent balance means there is an option for money to be spent where it is needed.

House Health and Human Services Budget Target: $11,622,685,000

The HHS finance committee budget target was set at $11,622,685,000 ($11.62 billion). This budget target is $1,489,520,000 (nearly $1.5 billion) less than the governor’s proposed HHS budget target of $13,112,205,000 ($13.1 billion), and about $1.15 billion less than the February forecast estimated expenditures for FY 2016-17. Rep. Knoblach said that this was an effort to cut some of the growth in the area of HHS, in particular spending related to medical assistance, and that he expected to see savings in this area over the next biennium.

Rep. Tina Liebling expressed concern that the expected savings was not strictly a factual number and urged the committee to consider her amendment, which would increase the HHS budget target to the Governor’s proposed $13.1 billion using the unspent $314 million and about $1.18 billion from the tax bill. During her discussion on her amendment, Rep. Liebling pointed out that many of the initiatives put forth this session related to improving the lives of Minnesotans might not be well funded or funded at all. While a majority of her comments were related to increased funding needs for older adults and individuals with disabilities, she did point out that the Governor’s proposal includes more funding for children and families, particularly for child protection, and that she “can’t imagine we’re going to leave this session without funding child protection.” She urged the committee to think of increased funding for at-risk children and youth as an investment, to reduce spending down the road.

Rep. Knoblach shared Rep. Liebling’s concerns, but he also expressed concern that HHS “continually outstrips inflation,” resulting in funding being taken from other budget areas. He showed that while HHS would receive less funding under his proposal compared to the Governor’s budget proposal and the FY 2016-17 forecasted base, HHS would still be receiving more funding ($443 million) compared to FY 2014-15. Rep. Matt Dean, chair of the House HHS Finance Committee, said that his committee’s primary concern was to seek out savings related to Medicaid spending, saying “quite frankly, [Medicaid] is eating our state budgets.”

In the end, Rep. Liebling’s amendment was not adopted.

House Education Finance Budget Target: $16,866,550,000

The education finance committee budget target was set at $16,866,550,000 ($16.87 billion), which Rep. Knoblach pointed out was an increase of about $1.06 billion compared to FY 2014-15. This comparison does not take into consideration the additional money spent in FY 2014-15 to pay back the schools. Taking that into account, the increase is about $247 million from FY 2014-15, and $about $157 million compared to the FY 2016-17 forecast base.

Rep. Mary Murphy introduced an amendment that she said was more in line with the Governor’s budget proposal of $17,404,393,000. Her amendment would have used $2 billion currently alloted to the tax bill (the proposed tax cuts). When asked whether the House budget target for education would meet the needs of children and youth, Rep. Jenifer Loon, chair of the House Education Finance Committee, said that she felt she would be able to make Rep. Knoblach’s budget target work by making wise investments, and that it would not impact the committee’s ability to address issues like the achievement gap.

Rep. Murphy’s amendment also did not pass.

House Budget Resources

House Documents

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